NEWS – TUESDAY 21ST JULY 2020

NEWS ROUNDUP

COVID-19 SUPPORT FOR BUSINESS

Key dates for the Coronavirus Job Retention Scheme (CJRS)

Here is a reminder of some upcoming key dates and actions that need to be taken: –

Key dates

  • You should submit CJRS claims for periods ending on or before 30th June 2020 by 31st July 2020. This is the last date to make those claims. Employers need to have made a claim at any point on or before 31st July to be able to make a claim for future months.
  • From 1st August 2020 the scheme will no longer fund employers’ National Insurance (NI) and pensions contributions for furloughed employees. Employers will have to make these payments from their own resources.
  • From 1st September 2020 employers will have to start contributing to the wages of furloughed employees. Grants will be for 70% of usual wages in September and 60% in October, but furloughed employees will continue to be entitled to receive at least 80% of their usual wages. Employers will have to make up the difference from their own resources.

TAX NEWS – TUESDAY 21ST JULY 2020

PAC calls for pension tax relief review

The Public Accounts Committee (PAC) has called for a wide-scale review of pension tax reliefs, suggesting that the Government does not have enough information on whether the scheme is effective. While ministers say that the policy, which cost the Treasury £38bn in 2018/19, provides an incentive to save long-term, the PAC said: “The Government has not made any assessment of whether that huge cost actually encourages saving for retirement or reduces dependence on state retirement benefits, or whether it just enables those already saving comfortably to save more.” The report also flags concern that certain workers were not benefiting from pension relief, saying around 1.75m low-paid and part-time workers earning less than the personal allowance “will not be getting tax relief on their pension contributions after being auto-enrolled into employer pensions”. Victoria Todd, head of the Low Income Tax Reform Group, welcomed the PAC’s report, saying: “Its recommendation of publishing more data is helpful in terms of making the issue more transparent.”

Daily Mail

NICs plan to add £200 to self-employed workers’ tax bills

Analysis by the independent House of Commons Library shows that the average self-employed worker faces an extra £200 on top of their tax bill due to the Chancellor’s plan to increase their National Insurance contributions. Rishi Sunak has signalled that Class 4 NICs that the self-employed pay will be brought in line with employees, suggesting this would be price for “parity of support” with the furlough scheme for employees. Liberal Democrat leadership contender Layla Moran has questioned the plan, describing it as a “tax on entrepreneurship”.

The Sun, Page: 2

CORPORATE NEWS – TUESDAY 21ST JULY 2020

Debt plan for COVID-19 loans

Mark Halstead of Red Flag Alert looks at concerns that a “dangerous level of unsustainable government-backed business debt” could see more than 800,000 firms fail if payments cannot be deferred when they are due next year, considering a proposal for a student loan-style scheme put forward by TheCityUK. He says the plan, which would see coronavirus support loans converted into a tax debt, would mean debt will only be paid back when and if a business reaches a certain level of sales. He says such a scheme would position HMRC to collect more detailed and current data, “which could drive more robust fiscal management, promote more responsible borrowing and ensure financial obligations are met more consistently”.

The I, Page: 41

Cruise ship firm ceases trading

Cruise firm Cruise & Maritime Voyages is to shut down, administrators at Duff & Phelps have confirmed. The company had been looking to secure additional finance, having been hit by the coronavirus crisis, and was in discussions with investor VGO Capital Management. However, Duff & Phelps said the firm was unable to conclude the funding within the timescales required. CMV has ceased trading and international sales offices in Australia, France, the United States and TransOcean Tours in Germany have been closed. Administrators said the action was “likely to result in the redundancy of the UK employees and an uncertain future for those employees in the wider group.”

The Times, Page: 46 Daily Star Daily Mirror

Luggage firm bags rescue deal

Luggage firm Antler has been sold out of administration to ATR, the holding company of South African tycoon Michael Lewis. Antler went into administration in May, having taken a hit when the travel and retail sections all but shut down due to lockdown restrictions. Will Wright of KPMG comments: “We are delighted to have concluded this deal, which safeguards the future of this storied and iconic brand. ATR is in a strong position to be able to take the Antler business forward.”

The Sun, Page: 43

Gym chain set to appoint administrators

Low-cost gym chain Xercise4Less has filed a notice of intent to appoint administrators. The chain, which has about 50 sites, was put up for sale in May by investors and shareholders including the Business Growth Fund and Proventus Capital Partners. The firm, which is working with advisors at PwC, is looking to protect itself from creditors while it finalises a deal to overhaul the structure of the business.

The Daily Telegraph, Business, Page: 3

PROPERTY NEWS – TUESDAY 21ST JULY 2020

Mini boom pushes house prices to record high

A housing market “mini boom”, fuelled by this month’s stamp duty cut, has pushed the average price tag on a property to a new record high, according to Rightmove. Its latest figures show that the average price of a property coming on to the market in Britain reached £320,265 this month – the highest figure since the site started its report in 2001. This was up 2.4%, or more than £7,000, on the previous record of £312,625 reported in March, just before the housing market was put on hold by the coronavirus pandemic. Overall, enquiries were up 75% year-on-year in Britain, and Rightmove added that it expected the activity to increase even further, as Scotland’s market had not yet been open for a full month, and Wales still had some restrictions in place.

The Daily Telegraph, Business, Page: 8 Daily Mail

PERSONAL FINANCE NEWS – TUESDAY 21ST JULY 2020

Pandemic hits incomes

The Resolution Foundation says working-age households have suffered the worst income shock since mid-1970s, with the coronavirus crisis delivering a 4.5% decline in typical household incomes in May. The decline is the steepest since the 5.1% recorded in 1974 and exceeds the 2.7% fall in incomes seen in the wake of 2008’s financial crash. The think-tank’s Living Standards Audit says Government support has softened the impact for many people, calculating that without Government intervention the incomes of the poorest fifth of households could have fallen by as much as 8%. Adam Corlett, the Resolution Foundation’s senior economist, said: “This initial phase of the crisis has shown the importance of bold job support and a stronger social security safety net.”

The Daily Telegraph, Page: 7 The Independent, Page: 14 Daily Mail, Page: 66 Daily Mirror, Page: 9 Daily Express, Page: 47

EMPLOYMENT NEWS – TUESDAY 21ST JULY 2020

Job vacancies down 60%

Analysis by jobs site CV-Library shows that employment opportunities in the UK fell by 62% in the three months to June compared to Q2 2019, with the figure as high as 80% in some regions. Sectors which saw the biggest fall in advertised vacancies include administration, design, sales, recruitment, catering, media, and marketing.

The Independent, Page: 46

ECONOMY NEWS – TUESDAY 21ST JULY 2020

BoE economist sees V-shaped recovery

Andy Haldane, the Bank of England’s chief economist, says the UK economy has seen a V-shaped “bounceback” following the coronavirus crisis. He told MPs on the Treasury Select Committee: “Roughly half of the roughly 25% fall in activity during March and April has been clawed back over the period since,” adding that the economy had grown by about 1% per week since hitting its floor in mid-April. Mr Haldane noted, however, that while there is evidence of a V-shaped bounceback so far, “that of course doesn’t tell us about where we might go next.” He also told MPs that unemployment was rising and probably stands at about 6%, compared with the 3.9% recorded in the most recent official figures.

The Guardian, Page: 30 City AM BBC News

Households continue to rein in spending

IHS Markit’s household finance index increased to 41.5 this month from 40.7 in June, while the forward-looking index declined to 42.5 in July from 45.9 a month earlier. Tim Moore, director at IHS Markit, remarked: “UK households continue to tighten the purse strings despite a phased reopening of the economy,” warning that “extremely cautious spending patterns” reflect “widespread anxiety about jobs and the outlook for earnings”. Economists have noted that the sharp reduction in household spending in July could boost the economy if it is released as lockdown eases, but cautioned that there is potential for it to be held back if people continue to spend less.

City AM

OTHER NEWS – TUESDAY 21ST JULY 2020

Model admits tax dodge

Israeli model Bar Refaeli has admitted failing to pay tax on $10m in a case centered on whether she was an Israeli resident for tax purposes. She pleaded guilty to four charges of tax evasion and was given nine months community service. She will pay £1.85m in back taxes as well as a £1.2m fine. Her mother Tzipi was found to have acted to disguise Ms Refaeli’s residence status, with it also ruled that she failed to declare fees that she earned from her daughter’s modelling. She was sentenced to 16 months in prison.

The Times, Page: 34 The Guardian, Page: 23

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